Amazon Demands Investigation against Future The global e-Commerce giant, Amazon have taken a big step against one of the leading retailers of India. It has asked the market regulator Securities and Exchange Board of India (SEBI) to investigate Future Retail Ltd for insider trading, and accused the Kishore Biyani retail firm of breaching confidentiality by leaking the interim award of Singapore International Arbitration Centre (SIAC) to Reliance Industries Ltd. Amazon has been pressing the SEBI to review Reliance's August deal to buy retail, logistics, and other assets from Future Group for $3.4 billion including debt. Amazon argues it had a 2019 agreement with Future, which prevented the Indian group’s retail assets from being sold to certain parties including Reliance Industries (RIL).

The letter to SEBI, dated November 8, alleges Future Retail disclosed to RIL price sensitive details of an injunction granted by a Singapore arbitrator to block the deal. The spat is being closely watched as a key test of whether Indian firms, courts and regulators will respect arbitration decisions made in accordance with overseas arbitration rules, and adds to headaches for Amazon in India, which is also dealing with antitrust challenges.

The injunction was granted on October 25 and was reported by media with Amazon issuing a short statement saying it welcomed the decision. Later that evening, RIL said, in a stock exchange filing, that it had been informed of the arbitration order and would enforce its rights to complete the deal with Future without delay. It is this October 25 filing, which Amazon argues in its 20-page letter that indicates RIL was privy to price sensitive details of the injunction. “Details of the interim award

The letter to SEBI, dated November 8, alleges Future Retail disclosed to RIL price sensitive details of an injunction granted by a Singapore arbitrator to block the deal

was disclosed to Mukesh Dhirubhai Ambani (MDA) Group by Future Retail or its promoters prior to the same being disclosed to the general public, in an egregious breach of the Prohibition of Insider Trading regulations (PIT),” the US retail giant wrote in a letter to market regulator SEBI, adding that the first public disclosure of the interim award was made by MDA Group, which was not a party to the arbitration proceedings.

Amazon indirectly owns a 5 percent stake in Future Retail, which houses all food and grocery stores such as Big Bazaar, HyperCity, Easyday and Nilgiri’s, through a 49 perccent stake in promoter holding firm Future Coupons that it bought for Rs. 1,500 crore last year. The Seattle based e-tailer has accused Future of violating the contract by selling the business to Reliance without Amazon’s approval. “This interim order purported to injunct a transaction between us and Reliance. Proprietary and legality demands that in such an event, the counterparty is informed about the development, however infirm the injunction may be,” said a Future Retail spokesperson, adding that SEBI regulations are quite clear and the communication was for a legitimate purpose.

Amazon on Wednesday told the Delhi High Court that the emergency arbitration award against Future Retail by the Singapore arbitrator was ‘a valid order’ and the e-commerce major had the right to inform statutory bodies about it. Senior advocate Gopal Subramanium, appearing for Amazon, said the suit filed by Future Retail was “doubtful” and not maintainable. Gopal said Future Retail participated in the proceedings before the emergency arbitrator and also urged it not to pass an interim order till an arbitrator is appointed on behalf of the Future Group.